The long term goal of these studies is to define the host-virus Interactions that occur during hepatitis C virus (HCV) infection with the hope that this knowledge will lead to the discovery of improved therapeutic approaches to this important human pathogen. HCV is a noncytopathic, positive-strand RNA virus that causes acute and chronic hepatitis and hepatocellular carcinoma. Approximately 2-4 million persons are chronically infected by HCV in the USA and 170 million people are chronically infected worldwide, many of whom will die from liver failure and hepatocelluar carcinoma. Elegant in vitro experiments have revealed that HCV strongly inhibits type 1 IFN production in infected cells by blocking the retinoid inducible gene-I (RIG-I)- mediated pathway. In contrast, HCV strongly Induces type 1 IFN responses in the liver despite this evasion mechanism. This discrepancy suggests that HCV might trigger type 1 IFN production in the liver by cells other than infected hepatocytes. In experiments that form the basis of this application, we showed that human peripheral blood plasmacytoid dendritic cells (pDCs) produce large amounts of IFNa and IFNp when they are cocultured with HCV-infected human hepatoma-derived Huh-7 cells. We also showed that IFNproduction correlates strongly with the HCV RNA content of the Huh-7 cells, that it requires direct cell-cell contact between the pDCs and the infected cells, that it is not induced by free infectious HCV particles, and that it is mediated by Toll-like receptor 7 (TLR7) in the pDCs. Importantly, active viral RNA replication by the hepatocyte, not virus particle formation, is required to produce the pDC-activatIng signal, implying that a unique cell-cell RNA transfer mechanism could mediate this response. These unexpected observations help resolve the contradiction between the ability of HCV to induce type 1 IFN in the Infected liver and its ability to block type 1 interferon production by cells it infects. The host apparently avoids this viral evasion strategy via pDC sensing of the infected cells. To my knowledge, this is a novel aspect of the host response to viral infection that deserves to be characterized and more fully understood. In this appiication, therefore, we will define the cellular and molecular characteristics of this exciting new mechanism. In Specific Aim 1. we will identify the molecular nature of the HCV-related signal that activates the pDC, focusing on the viral RNA as the likeliest candidate. In Specific Aim 2, we will examine the cellular mechanisms whereby that signal is produced and how it is transferred to the pDC. In Specific Aim 3, we will explore the extent to which this mechanism is operative in the chronically HCV infected liver.